# Once again, two ice cream truck vendors, A and B, are playing a simultaneous pricing game....

###### Question:

Once again, two ice cream truck vendors, A and B, are playing a simultaneous pricing game. If only one of the vendors prices low, he gets all the customers for a payoff of 12, while the other vendor gets no customers and a payoff of zero. If both vendors price high, they each get a payoff of 6. If both price low, they each get a payoff of 5. ​Suppose that the above game is repeated indefinitely, and together the vendors adopt a trigger strategy such that they would start charging the low price only if the other vendor charged a low price last time. Provided that the vendors stick to their new strategy, what would be the Nash equilibrium going forward?

a) ​Both the vendors price high

b) ​Both the vendors price low

​c) Vendor A prices high, vendor B prices low

d) ​Vendor B prices high, vendor A prices low

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